Competitive Switching: proposed rule allowing shipper access to a second carrier ($3-5K switching fee)
Reciprocal Switching: Canada already has this; US is debating it under current STB chair
Service complaints: STB can investigate and order railroads to improve service
Reality check: STB proceedings are expensive ($500K-$2M+) and slow (years)
But the THREAT of an STB complaint has negotiating value — railroads know the rules
Shipper Advocacy Organizations
🏛️. NITL. National Industrial Transportation League. Largest shipper advocacy group. Lobbies Congress and STB. Annual conference with railroads. Rate and service benchmarking. Legal resources for rate challenges. 🏭. MARS. Manufacturers Alliance for Rail Shippers. Focus on captive shipper issues. Competitive switching advocacy. Coalition with agricultural shippers. Testifies at STB hearings. Strong chemical industry participation. 🗺️. NEARS. NE Association of Rail Shippers. Regional focus (NE corridor). Ports and intermodal issues. Smaller, more accessible. Good networking for eastern shippers. Annual meeting and workshops.
PSR Survival Checkpoint
✓ You understand what PSR is and why railroads adopted it. ✓ You know how PSR prioritizes traffic (intermodal > unit > carload). ✓ You can adapt your operations: faster turns, buffer inventory, predictable loading. ✓ You know when short-line railroads are a better option. ✓ You understand the STB's role and when to use it as leverage. ✓ You know the major shipper advocacy organizations and their focus.
📋 Practical Exercise: PSR Impact Assessment
Evaluate your current rail service under PSR:. 1
Pull your transit time data for the past 12 months. - Average transit time by lane | On-time percentage | Trend (improving/declining?). 2
Pull your demurrage data for the same period. - Monthly charges | Root causes | Trend. 3
Document service issues: missed switches, late deliveries, car shortages. 4
Calculate the total PSR cost impact:. - Increased transit time x inventory carrying cost. - Demurrage increase vs. 3 years ago. - Additional fleet leasing to compensate for longer cycles. 5
Identify your top 3 adaptation priorities. 6
Build a 90-day action plan with specific, measurable targets
Precision Scheduled Railroading — efficiency-focused operating model
Operating Ratio
Operating expenses / revenue; PSR targets sub-60%
Manifest Train
Mixed-commodity train; most affected by PSR cuts
Competitive Switching
Proposed rule allowing access to a second railroad carrier
Common Carrier Obligation
Railroad's legal duty to serve any shipper requesting service
Surface Transportation Board — federal railroad regulator
National Industrial Transportation League — shipper advocacy
Hunter Harrison
Railroad executive who created PSR (IC, CN, CSX, CP)
Reciprocal Switching
Mandatory interchange access between carriers (exists in Canada)
Review Questions
1. What is PSR and who created it?. 2. Why did Wall Street push railroads to adopt PSR?. 3. How does PSR prioritize different types of rail traffic?. 4. What operational changes can shippers make to adapt to PSR?. 5. When is a short-line railroad a better option than a Class I?. 6. What is competitive switching and why do shippers want it?. 7. What is the common carrier obligation and how does it protect shippers?. 8. Name the 3 major shipper advocacy organizations and their focus areas.
Practical Assignment
Step 1: Collect your rail service data: transit times, on-time %, demurrage, car supply issues
Step 2: Calculate the financial impact of PSR on your operations (vs. 3 years ago)
Step 3: Identify which of your lanes are most affected by PSR (longest delays, highest demurrage)
Step 4: Research short-line alternatives for your worst-performing lanes
Step 5: Draft a service improvement request letter to your railroad representative
Step 6: Join (or research) NITL or MARS — attend their next meeting or webinar
Step 7: Build a 90-day PSR adaptation plan with measurable targets
Step 8: Present your findings and plan to your supply chain leadership team
Key Takeaways
✅ PSR is permanent — every Class I has adopted it and Wall Street demands it continue. ✅ Carload shippers are the most affected: longer transit, higher demurrage, less reliability. ✅ Adapt your operations: faster car turns, buffer inventory, predictable loading windows. ✅ Short-line railroads are often the best option for carload freight under PSR. ✅ Document every service failure — you need data for negotiations and STB complaints. ✅ The STB is your regulatory backstop, but proceedings are expensive and slow. ✅ Shipper advocacy matters — NITL, MARS, and NEARS give you a collective voice. ✅ The best defense is operational excellence + commercial leverage + regulatory awareness.
